76 FR XXXX The CFTC approved a final rule requiring certain advisors to private funds that are dually registered with the CFTC and the SEC to report information to the SEC for use by the Financial Stability Oversight Council (FSOC) in monitoring risks to the U.S. financial system. The SEC had previously approved the joint rule on October 26, 2011. The Commissions' final rules, which implement Sections 404 and 406 of the Dodd-Frank Act, require SEC-registered investment advisers and dually registered CFTC registrants with at least $150 million in private fund assets under management to

Europa October 20, 2011 On the same day that it announced the new MiFID regime, the European Commission also published its proposals for a new regulation and directive devoted to tackling the issue of market abuse. Among the key features of the proposals are: criminal sactions for traders who have incited, aided or abetted market abuse; applicability to a wider range of financial instruments and contracts; broadening of the definition of market manipulation; and a clearer definition of 'inside information'. The proposals will now pass to the European Parliament and the Council for negotiation

SEC Press Release No. 2011-230 October 31, 2011 The SEC and CFTC issued a joint statement that they have "determined that a SIPC-led bankruptcy proceeding would be the safest and most prudent course of action to protect customer assets." SIPC separately announced that it is initiating a liquidation of MF Global. For more information about this document, you may contact one of the following Cadwalader attorneys: Steven Lofchie; Jeffrey Robins. Cross References: SIPC Press Release (10/31/11); Lofchie's Guide to Broker-Dealer Regulation: Chapter 12, Insolvency; Lofchie's Guide to CPO/CTA

Europa October 18, 2011 On 18 October 2011, the European Parliament published a press release on an agreement with the Presidency of the EU Council on the proposed regulation on short selling and certain aspects of credit default swaps (CDS). The three rules which will be introduced are: 1. A ban on naked CDS trading with a carve out for national authorities in relation to sovereign debt market dysfunction; 2. A set of powers for ESMA to restrict short selling and to act as an intermediary for any national authority wishing to introduce measures for exceptional circumstances; and 3. An

Wachovia Bank NA v. VCG Special Opportunities Master Fund, No. 10-1648-cv (2d Cir. Oct. 28, 2011) October 28, 2011 In an opinion by Judge Kearse, the Second Circuit Court of Appeals held that a hedge fund that transacted with a banking affiliate of a broker-dealer in credit default swaps which were not "recommended" by the broker-dealer did not qualify as a "customer" for purposes of the FINRA arbitration rules. The court distinguished two recent precedents in which a "customer" relationship was found, noting the absence in this instance of a recommendation by the broker-dealer or a direct